Paris Agreement goals could save trillions in avoided climate damages

Paris Agreement goals could save trillions in avoided climate damages
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The U.S. is the only country in the world to turn away from the Paris Agreement, which world leaders developed in order to reduce greenhouse gas emissions and help avert the dire impacts of climate change. The Trump administration claims they must withdraw because the agreement will cause unacceptable harm to the U.S. economy. This claim is not supported by scientific evidence.

Multiple peer reviewed studies have shown that pursuing the ambitious climate mitigation targets laid out in the Paris Agreement would benefit the U.S. economy, and that ignoring the Paris Agreement poses serious economic, humanitarian and ecological risks. Now, in a new paper our Stanford research team finds that the climate mitigation goals agreed upon in the Paris Agreement are likely to save the world tens of trillions of dollars in avoided climate damages, far outweighing previously-estimated costs of achieving those goals.

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We estimate that beneficiaries will include not only the world’s poorest countries, which stand to benefit substantially, but also many wealthier countries, including the United States. In fact, we calculate the cumulative savings to the U.S. economy alone of meeting the most ambitious Paris targets could total $6 trillion (in today’s dollars).

 

The Paris Agreement is made up of essentially two pieces: a collective global-scale goal, and individual national-scale commitments. The goal component states that the nations collectively agree to try to hold global warming to between 1.5 and 2˚C above pre-industrial levels. But when added together, the commitments made by the individual countries put the world on track for global warming that is closer to 3 degrees Celsius.

A primary reason that the countries’ commitments don’t add up to the agreement’s goal is that doing so would require substantial financial investment. The fact that individual countries have not been willing to commit to the emissions reductions that are needed to achieve the collective goal suggests that, so far, they haven’t perceived the benefits to outweigh the costs. 

In his statement announcing his intention to withdraw the U.S. from the Paris Agreement a year ago, President TrumpDonald John TrumpAl Gore: Trump has had 'less of an impact on environment so far than I feared' Trump claims tapes of him saying the 'n-word' don't exist Trump wanted to require staffers to get permission before writing books: report MORE asserted that the agreement would harm the U.S. economy, including through “vastly diminished economic production”. But our results show the opposite — that in fact achieving the Paris goals is much more likely to benefit the U.S. economy by avoiding the diminished economic production caused by higher levels of global warming. Quantifying how much economic damage will be avoided if severe climate change is kept in check is therefore a critical factor when considering the value of investing in emissions reductions.

The economic impacts from recent extreme events such as Superstorm Sandy and the California drought, and the continued humanitarian crisis in Puerto Rico following last year’s back-to-back hurricanes, are unfortunate examples of the type of damage that results from climate-related risks.

The Paris Agreement is meant to curb these risks by limiting the amount of global warming. Only when the avoided damages are considered can we evaluate whether the benefits of the emissions reductions outweigh the costs of achieving them. 

Prior to our study, accurate, quantitative estimates of those benefits were not available. Now, we find that the benefits of achieving the ambitious Paris targets are perhaps 30 times larger than the costs. Basically, every dollar spent on mitigation generates many more dollars in benefits by preventing more serious damage from occurring. We also find that most countries are likely to share in these benefits, including the U.S., China, and most of the world’s poorest countries.

Our new estimates of the economic benefits of reducing climate pollution are calculated based on the historical relationship between warm years and economic growth in each country around the world. Our estimates therefore don’t include the additional “co-benefits” of reducing greenhouse gas emissions, such as the cleaner air that comes from replacing coal-fired power plants with combustion-free alternatives like wind and solar, or the added jobs and technological innovation that come from leveling the economic playing field for those alternatives.

When those co-benefits are also considered, the total economic benefits of achieving the Paris Agreement’s ambitious climate goals are likely to exceed the tens of trillions of dollars calculated in our new study. Thus, while acting on climate change will no doubt require substantial investment — doing nothing will be even more costly.

Marshall Burke is an assistant professor in Stanford University’s Department of Earth System Science, as well as a fellow at Stanford’s  Center on Food Security and the Environment. 

Noah Diffenbaugh is the Kara J Foundation professor in Stanford University’s Department of Earth System Science, and the Kimmelman Family senior fellow in the Stanford Woods Institute for the Environment.